Question

On December 21, 2017, Martinez Company provided you with the following information regarding its equity investments....

On December 21, 2017, Martinez Company provided you with the following information regarding its equity investments.

December 31, 2017

Investments (Trading)

Cost

Fair Value

Unrealized Gain (Loss)

Clemson Corp. stock $20,800 $19,900 $(900 )
Colorado Co. stock 9,300 8,300 (1,000 )
Buffaloes Co. stock 20,800 21,420 620
Total of portfolio $50,900 $49,620 (1,280 )
Previous fair value adjustment balance 0
Fair value adjustment—Cr. $(1,280 )


During 2018, Colorado Company stock was sold for $8,790. The fair value of the stock on December 31, 2018, was Clemson Corp. stock—$19,990; Buffaloes Co. stock—$21,320. None of the equity investments result in significant influence.

(a) Prepare the adjusting journal entry needed on December 31, 2017.
(b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2018.
(c) Prepare the adjusting journal entry needed on December 31, 2018.

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